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The Wall Street Journal on Longterm Joblessness

WASHINGTON, D.C. | June 2, 2010

In Pittsburgh, Penn., President Obama credited his administration’s economic policies for “breaking the freefall” of the current recession. Despite more than 15 million Americans still looking for work, the president declared the nation is “again moving in the right direction.” But as the Wall Street Journal reports, the nation’s seven million long-term unemployed workers – those unable to find work for more than six months – may feel differently.

"The job market is improving, but one statistic presents a stark reminder of the challenges that remain: Nearly half of the unemployed—45.9%—have been out of work longer than six months, more than at any time since the Labor Department began keeping track in 1948.

"Even in the worst months of the early 1980s, when the jobless rate topped 10% for months on end, only about one in four of the unemployed was out of work for more than six months.

"Overall, seven million Americans have been looking for work for 27 weeks or more, and most of them—4.7 million—have been out of work for a year or more.

"Long-term unemployment has reached nearly every segment of the population, but some have been particularly hard-hit. The typical long-term unemployed worker is a white man with a high-school education or less. Older unemployed workers also tend to be out of work longer. Those between ages 65 and 69 who still wish to work have typically been jobless for 49.8 weeks.

"The effects of long-term unemployment are likely to linger when the overall jobless rate falls toward normal, threatening to create a pool of nearly permanently unemployed workers, a condition once more common in Europe than in the U.S."

The American people don’t need another speech on the same failed economic plan – they need commonsense solutions to help create jobs and put people back to work. If the president is serious when he claims to seek Republican ideas, he should start by considering the GOP no-cost jobs plan.

Chronic Joblessness Bites Deep

Long-Term Unemployment Hits New High, Cuts Across Income Levels, Demographics

By SARA MURRAY
June 2, 2010

The job market is improving, but one statistic presents a stark reminder of the challenges that remain: Nearly half of the unemployed—45.9%—have been out of work longer than six months, more than at any time since the Labor Department began keeping track in 1948.

Even in the worst months of the early 1980s, when the jobless rate topped 10% for months on end, only about one in four of the unemployed was out of work for more than six months.

Overall, seven million Americans have been looking for work for 27 weeks or more, and most of them—4.7 million—have been out of work for a year or more.

Long-term unemployment has reached nearly every segment of the population, but some have been particularly hard-hit. The typical long-term unemployed worker is a white man with a high-school education or less. Older unemployed workers also tend to be out of work longer. Those between ages 65 and 69 who still wish to work have typically been jobless for 49.8 weeks.

The effects of long-term unemployment are likely to linger when the overall jobless rate falls toward normal, threatening to create a pool of nearly permanently unemployed workers, a condition once more common in Europe than in the U.S.

"The consequences are worse for those who can't find a job quickly," said Till Marco von Wachter, a Columbia University economist. They extend from atrophying skills to a higher likelihood of unhappiness and anxiety. Workers out of work for a long time tend to find it more difficult to find a job, and "the longer people are unemployed the more likely they are to eventually give up searching and thereby drop out of the labor force," Mr. von Wachter said.